FACTORS INFLUENCING THE ADOPTION OF ONLINE TAX FILING SYSTEMS IN NAIROBI, KENYA
Innovation has been touted as the primary management tool in competitive market to enhance the competitiveness, productivity and flexibility of firms. It has the potential of enhancing operational efficiency and effectiveness. The study sought to investigate factors influencing the adoption of online tax filing systems by the medium tax payers in Kenya. The specific objectives included; to determine the extent to which the innovation’s perceived usefulness influence the adoption of online tax filing systems by the medium tax payers in Kenya; to assess how the innovation’s perceived ease of use influences the adoption of online tax filing systems by the medium tax payers in Kenya; and to establish how social systems influence the adoption of online tax filing systems by the medium tax payers in Kenya. The study combined the innovation diffusion theory (IDT), technology acceptance model (TAM) and the reasoned theory of action (TRA) to present an extended innovation diffusion model. The study adopted a descriptive survey research design. The study population comprised all the registered medium tax payers in in the service industry in Kenya (474). A sample size of 142 (30%) was selected for this study. A standardized survey questionnaire was used to collect primary data from the respondents. Convenient sampling was used to collect information from the identified respondents based in Nairobi, Kenya. Regression analysis and correlations were conducted to determine the relationship between the dependent variable and the independent variables of the study. The study established that positive increase in the relative advantage; triability; complexity; compatibility; system support; observability; organizational support; and social networks positively influences the adoption of online tax filing system by the medium tax payers in Kenya. The study further established that these factors considered collectively, supportive social system (measured by observability; organizational support; and social networks) has the most significant influence followed by perceived ease of use (measured by complexity; compatibility; and system support) and finally the perceived usefulness (insignificant) of the innovation (measured by relative advantage; triability). Empirical results also provide a strong support for the integrative approach. The findings suggested a combined approach for evaluating innovation adoption by combining the innovation diffusion theory (IDT), technology acceptance model (TAM) and the reasoned theory of action (TRA) to present an extended innovation diffusion model for adoption of online tax filing systems which can help organization decision makers in planning, evaluating and executing the use of the system. The study recommends several theoretical frameworks to bring structure and rigor to the adoption of online tax filing systems.
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